BB&T Settles False Claims Act Charges for $83M

BB&T Corp. will pay $83 million to settle charges that violated the False Claims Act in its handling of Federal Housing Administration (FHA) mortgages.

In a statement released by the U.S. Department of Justice, the Winston-Salem, N.C.-based company admitted that it certified for FHA insurance mortgage loans that failed to meet the federal underwriting requirements and did not comply with the FHA’s quality control requirements on these loans. The charges also revealed that BB&T management was aware of this problem through monthly reviews and reports from its quality control department. The settlement covers originations and underwriting conducted between January 1, 2006 and Sept. 30, 2014.

“While profiting from the FHA program, BB&T exposed the taxpayers to losses by failing to comply with HUD guidelines, and then took the additional step of falsely certifying that it had complied with such guidelines,” said U.S. Attorney John Horn of the Northern District of Georgia. “This settlement recovers substantial losses caused by BB&T’s decision to place its own profits above its commitment to adhere to HUD underwriting and quality control requirements.”

BB&T acknowledged the settlement in a press statement that said the inquiry was settled “without any admission of liability to avoid the cost and uncertainty of potential litigation.”